VIRGINIA BEACH, Va.--(BUSINESS WIRE)--
Armada Hoffler Properties, Inc. (NYSE: AHH) today announced its results
for the quarter and year ended December 31, 2015.

Highlights include:

Funds From Operations (“FFO”) of $9.6 million, or $0.22 per diluted
share, for the quarter ended December 31, 2015 compared to FFO of $8.0
million, or $0.20 per diluted share, for the quarter ended December
31, 2014. FFO of $35.9 million, or $0.87 per diluted share, for the
year ended December 31, 2015 compared to FFO of $28.1 million, or
$0.80 per diluted share, for the year ended December 31, 2014.

Normalized FFO of $10.6 million, or $0.24 per diluted share, for the
quarter ended December 31, 2015 compared to Normalized FFO of $8.2
million, or $0.20 per diluted share, for the quarter ended December
31, 2014. Normalized FFO of $38.7 million, or $0.93 per diluted share,
for the year ended December 31, 2015 compared to Normalized FFO of
$28.6 million, or $0.82 per diluted share, for the year ended December
31, 2014.

Same Store Net Operating Income (“NOI”) for the quarter ended December
31, 2015 up 2.0% on a GAAP basis and 4.5% on a cash basis compared to
the fourth quarter of 2014. Same Store NOI for the year ended December
31, 2015 up 3.2% on a GAAP basis and 5.5% on a cash basis compared to
the year ended December 31, 2014.

Core operating property portfolio occupancy at 95.3% compared to 95.7%
as of December 31, 2014.

Agreed to invest up to $23 million in the new Point Street Apartments
development project in the Harbor Point area of Baltimore, Maryland
with options to acquire a controlling interest upon the project’s
completion.

Completed the sale of the recently delivered Oceaneering International
office building for $30 million, representing a 20% profit.

To date, in 2016, the Company:

Completed the sale of the Richmond Tower office building for $78
million.

Acquired a $170.5 million retail portfolio totaling 1.1 million
square feet across 11 properties with the net proceeds from the
Oceaneering and Richmond Tower sales and borrowings on its
unsecured revolving credit facility.

Announced a cash dividend of $0.18 per common share for the first
quarter of 2016, representing a 5.9% increase over the prior
quarter’s cash dividend.

Commenting on the Company’s results, Louis Haddad, President and CEO,
said, “We closed the year at the high end of our expected range and
reported our sixth consecutive quarter of Same Store NOI growth. As we
look ahead to 2016, I continue to be optimistic about our Company and
the potential opportunities in our predevelopment pipeline. I am excited
that our Board has agreed to raise our first quarter 2016 dividend
almost 6%, demonstrating our commitment to enhancing value and returning
it to shareholders.”

Financial Results

Net income for the fourth quarter increased 62% to $8.4 million compared
to $5.2 million for the fourth quarter of 2014. Net income for the full
year increased 144% to $31.2 million compared to $12.8 million for the
full year 2014.

FFO for the fourth quarter increased 20% to $9.6 million compared to
$8.0 million for the fourth quarter of 2014. FFO for the full year
increased 28% to $35.9 million compared to $28.1 million for the full
year 2014. Normalized FFO for the fourth quarter increased 30% to $10.6
million compared to $8.2 million for the fourth quarter of 2014.
Normalized FFO for the full year increased 35% to $38.7 million compared
to $28.6 million for the full year 2014.

The period-over-period increases in net income, FFO and Normalized FFO
were primarily attributable to property acquisitions, the delivery and
stabilization of new real estate development projects and organic Same
Store NOI growth, partially offset by higher interest expense. Both net
income and FFO were negatively impacted by higher acquisition,
development and other pursuit costs. The period-over-period increases in
net income were also positively impacted by higher gains on real estate
sales, partially offset by higher depreciation and amortization from
acquired properties and new properties placed into service.

Operating Performance

At the end of the year, the Company’s office, retail and multifamily
core operating property portfolios were 95.8%, 95.5% and 94.2% occupied,
respectively.

Total construction contract backlog was $83.4 million at the end of the
year.

Balance Sheet and Financing Activity

In January 2016, the Company increased the total borrowing capacity on
its unsecured credit facility to $225 million, consisting of a $75
million term loan and $150 million revolving credit facility.

At December 31, 2015, the Company had $382 million of total debt
outstanding, including $74 million outstanding under its $150 million
revolving credit facility. Total debt outstanding excludes unamortized
GAAP fair value adjustments and deferred financing costs. Approximately
57% of the Company’s debt had fixed interest rates or were subject to
interest rate swap locks at December 31, 2015. After considering LIBOR
interest rate caps with strike prices at or below 150 basis points, 100%
of the Company’s debt was fixed or hedged at December 31, 2015.

During the fourth quarter, the Company raised $3.7 million of gross
proceeds under the At-The-Market (“ATM”) continuous equity offering
program at a weighted average price of $10.21 per share. In December,
the Company completed an underwritten public offering of 3.5 million
shares of common stock at $10.70 per share, generating net proceeds of
$35.1 million.

Outlook

The Company is introducing its 2016 full-year guidance. The Company
expects 2016 Normalized FFO in the range of $0.93 to $0.97 per diluted
share. The following table outlines the Company’s assumptions along with
Normalized FFO per share estimates for the full-year 2016.

Full-year 2016 Guidance [1]

Expected Ranges

Total GAAP NOI

$62.3M

$63.0M

Construction company annual segment gross profit

$4.7M

$5.2M

General and administrative expenses

$8.8M

$9.1M

Interest income

$2.9M

$3.1M

Interest expense

$16.3M

$16.9M

Normalized FFO per diluted share [2]

$0.93

$0.97

[1] Includes the sale of the five non-core properties by
June 30, 2016 and the impact of the two pending pipeline projects,
as well as additional shares that may be issued under the ATM
program, assuming favorable market conditions.

[2] Normalized FFO excludes certain items, including debt
extinguishment losses, acquisition, development and other pursuit
costs, mark-to-market adjustments for interest rate derivatives and
other non-comparable items. See “Non-GAAP Financial Measures.” In
addition, the calculation of Normalized FFO per diluted share
assumes 47.2 million weighted average shares and units outstanding,
including shares issued under the ATM program.

Supplemental Financial Information

Further details regarding operating results, properties and leasing
statistics can be found in the Company’s supplemental financial package
available at www.ArmadaHoffler.com
under the Investor Relations section.

Webcast and Conference Call

The Company will host a webcast and conference call on Thursday,
February 11, 2016 at 8:30 a.m. Eastern Time to review financial results
and discuss recent events. The live webcast will be available through
the Investor Relations page of the Company’s website, www.ArmadaHoffler.com,
or through www.viavid.com.
To participate in the call, please dial 877-407-3982 (domestic) or
201-493-6780 (international). A replay of the conference call will be
available through Friday, March 11, 2016 by dialing 877-870-5176
(domestic) or 858-384-5517 (international) and entering the pass code
13627723.

About Armada Hoffler Properties, Inc.

Armada Hoffler Properties, Inc. is a full service real estate company
with extensive experience developing, building, owning and managing
high-quality, institutional-grade office, retail and multifamily
properties in attractive markets throughout the Mid-Atlantic United
States. The Company has elected to be taxed as a real estate investment
trust (“REIT”) for U.S. federal income tax purposes.

Forward-Looking Statements

Certain matters within this press release are discussed using
forward-looking language as specified in the Private Securities
Litigation Reform Act of 1995, and, as such, may involve known and
unknown risks, uncertainties and other factors that may cause the actual
results or performance to differ from those projected in the
forward-looking statement. These forward-looking statements may include
comments relating to the current and future performance of the Company’s
operating property portfolio, the Company’s development pipeline, the
Company’s construction and development business, including backlog and
timing of deliveries, financing activities, as well as acquisitions,
dispositions and the Company’s financial outlook and expectations. For a
description of factors that may cause the Company's actual results or
performance to differ from its forward-looking statements, please review
the information under the heading “Risk Factors” included in the
Company's Annual Report on Form 10-K for the year ended December 31,
2014, and other documents filed by the Company with the Securities and
Exchange Commission.

Non-GAAP Financial Measures

The Company calculates FFO in accordance with the standards established
by the National Association of Real Estate Investment Trusts (“NAREIT”).
NAREIT defines FFO as net income (loss) (calculated in accordance with
GAAP), excluding gains (or losses) from sales of depreciable operating
property, real estate related depreciation and amortization (excluding
amortization of deferred financing costs) and after adjustments for
unconsolidated partnerships and joint ventures.

FFO is a supplemental non-GAAP financial measure. The Company uses FFO
as a supplemental performance measure because it believes that FFO is
beneficial to investors as a starting point in measuring the Company’s
operational performance. Specifically, in excluding real estate related
depreciation and amortization and gains and losses from property
dispositions, which do not relate to or are not indicative of operating
performance, FFO provides a performance measure that, when compared
period-over-period, captures trends in occupancy rates, rental rates and
operating costs. We also believe that, as a widely recognized measure of
the performance of REITs, FFO will be used by investors as a basis to
compare the Company’s operating performance with that of other REITs.

However, because FFO excludes depreciation and amortization and captures
neither the changes in the value of the Company’s properties that result
from use or market conditions nor the level of capital expenditures and
leasing commissions necessary to maintain the operating performance of
the Company’s properties, all of which have real economic effects and
could materially impact the Company’s results from operations, the
utility of FFO as a measure of the Company’s performance is limited. In
addition, other equity REITs may not calculate FFO in accordance with
the NAREIT definition as the Company does, and, accordingly, the
Company’s FFO may not be comparable to such other REITs’ FFO.
Accordingly, FFO should be considered only as a supplement to net income
as a measure of the Company’s performance.

Management also believes that the computation of FFO in accordance with
NAREIT’s definition includes certain items that are not indicative of
the results provided by the Company’s operating property portfolio and
affect the comparability of the Company’s period-over-period
performance. Accordingly, management believes that Normalized FFO is a
more useful performance measure that excludes certain items, including
but not limited to, debt extinguishment losses and prepayment penalties,
property acquisition, development and other pursuit costs,
mark-to-market adjustments for interest rate derivatives and other
non-comparable items.

For reference, as an aid in understanding the Company’s computation of
FFO and Normalized FFO, a reconciliation of net income calculated in
accordance with GAAP to FFO and Normalized FFO has been included on page
nine of this release.

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